For Sale By Owner Checklist: Guide to FSBO Paperwork

A real estate broker usually takes 5-6% of the sale price of a home for commissions. With the average home sales price in the U.S. hitting $375,000 in 2021, that’s up to $22,500 in commissions you pay just to sell your house!

Selling your own home can save you thousands on real estate agent commissions and let you stay in control of the process. You save about 3% by foregoing a seller’s agent, and the full 6% commission if you negotiate to not pay the commission for the buyer’s agent. Still, it’s not for the faint of heart. You will need to meet complicated legal requirements, navigate local regulations, and stay on top of required For Sale by Owner paperwork and deadlines.

Want to know how to sell your house without a Realtor? This For Sale by Owner checklist covers the important aspects you shouldn’t overlook with a guide to the paperwork for selling a house without a realtor.

Table of Contents

Overview of How to Sell Your Own Home

How does a For Sale by Owner work? Here’s an overview of the steps to selling a house by owner.

  1. Determine your home’s value
  2. Prepare your home for sale
  3. Market your home
  4. Negotiate and accept an offer
  5. Meet any seller obligations and contingencies
  6. Close on the sale

While these For Sale by Owner steps may sound easy, most steps require you to navigate federal, state, and local laws and regulations and complete specific paperwork and disclosures. You will also be faced with strict deadlines.

Tip for FSBO Sellers

Don’t think you need to do everything on your own! Don’t be afraid to turn to professionals at any step for FSBO advice and help. It’s very affordable to hire licensed professionals to draft or review documents, list your home on the MLS, stage your home & more!

Helpful Pre-Listing FSBO Paperwork

Most of these items are not strictly necessary, at least in most states, but they can be helpful to prepare for listing your home.  

Comparative market analysis (CMA)

This is an estimate of the market value of your home. A local real estate agent will typically prepare a free CMA with no obligation. The comparative market analysis is a very helpful tool to make sure you price your home correctly.

Appraisal

Home appraisals are typically ordered by the buyer and lender once you are under contract with a buyer. They reassure the lender that the property is worth at least as much as the loan amount. You can have your own appraisal done before listing if you choose to help with pricing your home.

Home inspection

Once you accept an offer, the buyer will generally order a home inspection, assuming they add this as a contingency in their offer. Still, you may decide to have an inspection done before listing to identify serious problems that should be addressed.

If the inspection does turn up problems, it’s better to have them fixed before listing rather than being blindsided while you’re under contract and forced to negotiate with the buyer. A defect may sound frightening or expensive to a buyer and they may ask for a credit that far exceeds the actual repair cost – or use it as an excuse to back out of the deal!

A pre-listing inspection may be worthwhile

Don’t think you need to do everything on your own! Don’t be afraid to turn to professionals at any step for FSBO advice and help. It’s very affordable to hire licensed professionals to draft or review documents, list your home on the MLS, stage your home & more!

Mortgage payoff statement

Request a payoff statement from your lender if you still have a mortgage to see your payoff amount. This includes additional costs that are not included in your current balance.

Original sales contract and/or disclosures

If you have it, checking your original purchase agreement and the disclosures you received when you bought your home may be useful. You will find this most beneficial when filling out your own disclosure forms to make sure you are not leaving out anything the previous owner disclosed to you.

Seller’s net sheet

You can use a basic seller’s net worksheet to estimate how much you will receive from selling your home after expenses like paying off the mortgage and closing costs. You can use it to compare offers and counteroffers that come in, and you’ll use an updated seller’s net sheet to prepare the Seller’s Closing Statement or Settlement Statement later.

Certificate of compliance

Most states do not require this, but some states, counties, and cities do. Getting the certificate can reduce the risk of complications with the sale if unexpected surprises come up.

Preliminary title report

While not necessary, it may be worth paying the typical fee of $25 to $150 from your county assessor or a title company for this report. It will tell you if there are title issues like back taxes owed, liens, or restrictions that can interfere with a sale. You can solve any issues before listing by paying off liens or adding them to your disclosures for the buyer and reducing your listing price accordingly.

Property survey

A survey is performed to show the legal boundaries of the property, easement locations, buildings, and improvements. Property surveys are not usually required, but it may be worth getting one before listing a FSBO if the property has a lot of land or there may be some confusion. The survey can be used to identify and correct issues that can stall the sale and reassure potential buyers.

Other FSBO Paperwork You May Need

Depending on the circumstances, you may need to gather additional documents before listing your home. These may be required in your state or county.

  • Water quality test
  • Septic system inspection
  • Major repair documentation
  • Notices from agencies such as new tax assessments or re-zoning
  • Trust documents for homes held in a trust
  • Estate settlement documentation if you inherited the home
  • Divorce decree if the home was or is held jointly with an ex-spouse

For Sale by Owner Tips Before Listing

Knowing how to sell a house by owner for top dollar involves more than following regulations and completing paperwork. It’s wise to invest some of the money you save on real estate commissions into getting your home ready and as appealing as possible. First impressions are everything, and many buyers already have hesitations about buying a FSBO. You don’t want to appear that you have cut corners just to save money.

These FSBO tips help you avoid the impression of a distressed FSBO listing which can make buyers assume you need to sell fast, may accept a lower offer, or have not kept up with maintenance.

Here are some suggestions:

  • Pay for professional real estate photography. Research shows homes professionally photographed sell faster and for more money! You can expect to pay as little as $100 to $300 depending on the area.
  • A pre-listing home inspection costs around $300 but it’s worth it if you don’t want surprises later. A good inspection can be a selling point for your home too.
  • A home appraisal is around $300 and may be worth the cost to price your home effectively.
  • Gather receipts or documentation of major repairs and upgrades you have done. Important details like the age of the roof or HVAC system can make your home more attractive.
  • Create a binder for open houses and the future buyer. Gathering warranties, manuals, inspection reports, pest reports, pest control services, and receipts for appliances, major systems, and repairs in one place makes your home stand out. It also reassures buyers that the home has been well maintained.

For Sale by Owner Checklist – After Listing

The next step in the For Sale by Owner process is actually putting your home on the market. Now that you have gathered all the important paperwork you need for pricing your home, you’re ready for the For Sale by Owner paperwork you need to complete while your home is listed.

Seller Disclosure

A seller disclosure form is required in most states and presented when you hold an open house, show a home, or receive an offer. It outlines important property defects or hazards you know about such as structural issues, lead paint, flooding, mold, and radon. If you do not provide a disclosure statement, you may be liable if the buyer makes a claim after the sale about defects you knew existed.

The disclosure statement is usually a standard form with yes/no questions for you to answer and provide details. You can likely download a free real estate disclosure form from your state Realtor Association.

If you are selling your own home in a “buyer beware” state, you have minimal obligations to disclose known defects.  You will need to check the disclosure obligations in your state – you may be required to disclose specific hazards or complete specific disclosure forms.

Lead-Based Paint Disclosure

Federal law requires you to disclose any known lead-based paint or hazards in your home if it was built before 1978. You must also provide buyers with the “Protect Your Family from Lead in Your Home” EPA pamphlet.

Think Successful FSBOs Are Rare?

9% of homes were sold FSBO in 2020 according to NAR. This figure does not include FSBO sellers who pay a flat fee to a brokerage to get their home listed on MLS which NAR counts as Realtor-assisted sales!

Purchase/Sale Agreement

After you receive and accept an offer, a final purchase and sale agreement must be drafted. This is the final, binding contract between you and the buyer. It will include all the terms of the sale including earnest money, contingencies, and closing date.

If the buyer has an agent, they will generally create the purchase agreement. Otherwise, this responsibility will fall to you. Even if it isn’t required in your state, it’s worth it to have a real estate lawyer draft or review the purchase agreement to make sure it’s legally binding and nothing is left out.

Amendment Form

The purchase agreement may need to be amended before closing. This is very common and may be related to correcting issues, appraisals, the condition of the property, or title issues. An amendment form can be used to change or expand on the original terms.

Buyer’s Appraisal Report

Lenders almost always order an appraisal of the home to make sure it is not higher than the mortgage amount. You probably will not get a copy of the appraisal report, but you can request it from the lender.

Home Inspection Report

Once the purchase agreement is drafted, the buyer will likely have the property inspected. Any issues that are turned up may be cause for negotiation. The buyer may ask you to make repairs or issue a credit for problems turned up in the inspection.

You will usually receive a copy of the inspection report if defects are found or you agree to share any costs with the buyer.

For Sale by Owner Closing Paperwork

The For Sale by Owner closing process can be confusing without a real estate agent. The seller will need to hire a title company which can also act as an escrow agent. The escrow agent orders the title report, property tax information, loan balances, and important paperwork. They also hold all money involved in a trust until closing.

Do you need an attorney for closing?

A real estate attorney must be present at closing in 22 states. Even if it isn’t required, it’s a good idea to hire a lawyer to review your contract and important documents!

 

Here is the most important FSBO closing paperwork you will need to provide or complete.

Deed

The deed is the document that transfers real estate ownership. It usually costs $50 to $250 to get a copy of the deed. You can get a copy through your county assessor’s or recorder’s office, or the title search company can request the deed during escrow. To transfer ownership, the deed will need to be notarized and filed with your county recorder’s office.

Property Tax Records

The escrow officer may handle this, or you may need to do some of the work yourself. Property tax records will be needed to prorate property taxes at closing, if necessary. In some states, property taxes are paid in arrears. Sellers will need to pay a prorated amount for the current tax year.

IRS Form 1099-S

Unless you meet the guidelines for the capital gains tax exclusion, you will need to complete form 1099-S to report the taxes you owe on the sale of the home.

Affidavit of Title

In most states, you must sign an affidavit of title stating you are the current property owner and there are no delinquent accounts, liens, tax debts, or legal issues involving the property.

Seller’s Closing Statement or Settlement Statement

The settlement sheet or closing statement is a final tally of the credits and costs of the transaction. The title company will complete this statement for you, but you should compare it to your seller’s net sheet and make sure everything is correct and nothing is missing.

The American Land Title Association (ALTA) settlement form is commonly used, but a different form may be standard in your area.

For Sale by Owner Guide to California FSBO Paperwork & Disclosures

California has arguably the most complex real estate laws in the United States with mountains of paperwork required in even a standard transaction. The disclosure process is particularly lengthy.

This makes California a great example of how hard it can be to sell your own house.

Note that this is only a partial checklist for selling a house by owner in California, but many of the most common disclosures have been included. You can see a more detailed sale disclosure checklist here.

Transfer Disclosure Form (TDS)

In California, the disclosure form sellers must complete is known as the transfer disclosure statement (TDS). This form covers defects, malfunctions, material facts, and special questions. If there are certain defects or hazards, additional disclosure forms may be required.

Natural Hazard Disclosure Statement

Sellers and brokers in California are legally required to disclose if the property is located in one or more of these six locally or state mapped hazard areas:

  • Special Flood Hazard Area
  • Dam Inundation
  • Earthquake Fault Zone
  • Wildland fire
  • Very High Fire
  • Seismic Hazard 

It’s also common to report supplemental hazards on this form including:

  • Military ordnance
  • Radon gas exposure
  • Airport influence area
  • Megan’s Law disclosure 

This disclosure statement is usually obtained through a third-party NHD report from a disclosure company, land surveyor, engineer, or other specialist.

Mello-Roos Disclosure

Sellers must inform potential buyers if the property is in a Mello-Roos Community Facilities District.

Disclosures Based on Home Age

Depending on the age of your home, you may be required to include these disclosures:

  • Home built before 1978: “Protect Your Family from Lead in Your Home” pamphlet and disclosure form.
  • Home built before 1960: Residential earthquake disclosure and “Homeowner’s Guide to Earthquake Safety” booklet
HOA FSBO Checklist
Selling a house in an HOA adds to the FSBO paperwork you need. It costs around $500 for the title company to order an almost 2” thick stack of HOA disclosures!

HOA Documents

If you are selling a home in an HOA, your FSBO checklist should include HOA documents including:
  • CC&Rs
  • Articles of Incorporation
  • Bylaws
  • Rules & Policies
  • Operating Budget
  • Assessments
  • Association Insurance
  • Fine structure
  • Copy of minutes of the meetings (if requested by a potential buyer)
  • A statement describing lease prohibitions (if applicable) 
Your HOA must provide these documents and cannot charge more than the reasonable actual cost to obtain them for you. The title company usually requests these documents, but they can also be requested with forms HOA-RS, HOA-IR, and HOA-RN.

Seller’s Affidavit of Non-Foreign Status or Qualified Substitute

The seller’s affidavit (AS) or Qualified Substitute (QS) form may be used to meet the guidelines of the federal Foreign Investment in Real Property Tax Act (FIRPTA).

Death on the Property

If you are aware of death on the property in the last three years, make sure this disclosure is on your checklist for selling a house in California! The state requires disclosure if the death is deemed a “material fact.”

Contingency Removal Form

California is the only state that requires a form to lift contingency restraints so a real estate transaction can continue to close. The contingency removal form is completed by the buyer.

For Sale by Owner Assistance & Resources – Build an FSBO Support Team

Are you feeling overwhelmed by complicated For Sale by Owner rules, paperwork, and local regulations? As you learn how to sell your house by owner, keep in mind one very important thing – you do not need to do everything yourself! Many FSBOs fall apart and end up with a real estate agent when sellers get overwhelmed by real estate transaction paperwork, navigating deadlines and rules, or having difficulty finding buyers. You can get FSBO assistance at any step of the process from experts who can handle specific tasks, usually for a flat-rate or hourly cost instead of a commission.

Here are great options for getting FSBO support with the most complicated or overwhelming tasks.

Real Estate Attorney

A real estate attorney can be a critical member of your support team to give you legal For Sale by Owner assistance, review the sales contract, and make sure all legal requirements are met.

Transaction Coordinator

Even real estate agents get overwhelmed by the amount of paperwork involved in real estate and turn to transaction coordination services for help. A TC in real estate handles all the FSBO paperwork for you, keeps track of deadlines, coordinates communication and follows up with other parties, and more.

Real Estate Document Preparer

An FSBO document preparation service is an affordable solution to get an FSBO paperwork package customized to your transaction and ready to sign.

MLS Listing Service

You don’t need to pay for a full-service real estate brokerage to have your home listed on the MLS. Make your home visible to buyers with a flat-rate MLS listing service that usually costs a few hundred dollars.

Title & Escrow Company

If possible, look for an escrow support team experienced with FSBOs and sellers who have limited representation. The title company and escrow agent will help by requesting and preparing many of the necessary documents for closing!

The steps to selling a house by owner can definitely seem overwhelming, but there are many FSBO resources that make the process easier and less stressful.

Are you planning to sell your own home? Transactly can help with affordable, nationwide transaction coordinator services at a low, flat fee. Get the help you need with For Sale by Owner paperwork, make sure no deadlines or details are missed, and your sale closes as smoothly as possible! 

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